RRSP contributions are not a financial priority for many Canadians

Thirty-six per cent of Canadians are not planning to contribute to their Registered Retirement Savings Plans (RRSPs) this year, with 40 per cent saying they do not have enough money to contribute, says a study by BMO Financial Group released this week.

The study also found that 47 per cent of respondents have contributed or plan to contribute to their RRSPs this year. The average amount contributed has decreased since last year, from $5,088 to $4,616. With the March 1 deadline looming, 17 per cent of respondents were still undecided as to whether they will contribute to their RRSPs.

Consult a financial professional

"Although the number of Canadians planning to contribute to their RRSP has remained steady since last year, a number of Canadians are not using their RRSP as an effective way to save for retirement," said Robert Armstrong, vice president, Multi Asset Solutions, BMO Global Asset Management. "Consulting a financial professional or having a financial plan can help you better understand how to manage your money, so you are making the right financial choices that will benefit you in retirement."

Other investment options

In addition to lack of money, respondents’ main reasons for not contributing to an RRSP were other expenses taking precedence (23 per cent) and other investment options taking priority (8 per cent).

For those contributing to an RRSP, their top reasons were: receiving a tax refund (44 per cent); having enough money to get by in retirement (42 per cent) and having enough for an ideal retirement lifestyle (38 per cent).